Kool Aid going to $18 ??

No, don’t worry, speculators in the global market for fruit punch haven’t cornered the Kool Aid market and that’s not the price of this drink mix.

At least yet.

But the proposed soda tax that Gov. Paterson is pushing and which lawmakers are resisting, could result in some steep hikes for powdered drinks, given the way the tax is proposed and could play out.

It may be one of the unintended consequences of the tax, or perhaps not.

The tax proposal would add an estimated penny an ounce to bottled sugary drinks. But for the powdered mix, the tax would be $1.28 per gallon.

So this 5 pound Kool Aid drink mix container which makes 8.5 gallons, would see an added tax of $10.88

The trouble is, such containers now sell for just under half of that.

According to one observer, you can buy this 8.5 gallon mix at Sam’s Club in Latham, NY for $5.88. Add the current 8 percent sales tax of 47 cents and it’s $6.35.

But throw in the $10.88 proposed sugar tax along with the new higher $1.34 sales tax (since it would be based on the price with sugar tax, kind of like compounding for taxes) and its $18.10.

This hasn’t gone unnoticed, there’s been at least onestory two stories about this phenomenon.

But the tax issue remains on the horizon, in part due to yesterday’s budget episode in which lawmakers, with a metaphorical gun to their heads, passed a one-week budget extender with $775 million in health care cuts. They are wondering, if a sugar tax or some other revenue raiser might be tucked into next week’s budget extender. Lawmakers have said they have to vote for the extenders or risk shutting down government.